NPWP in Indonesia: Everything You Need to Know
When you decide to invest and generate income in Indonesia, there are a lot of aspects you need to know well. The Indonesian tax system is one of them. Understanding NPWP in Indonesia (taxpayer identification number) is important for every individual and business in Indonesia.
In this article, we’ll discuss everything you need to know about NPWP – what is it, types of NPWP, required documents for obtaining NPWP, steps for obtaining NPWP, and many more.
Let’s get started!
What is NPWP in Indonesia?
NPWP, commonly known as Taxpayer Identification Number, is a unique 15-digit number that individuals and businesses must have if they work, invest, and do business activity in Indonesia.
It means NPWP is mandatory for you if you’re an expat or have PT PMA. We will discuss who can register for NPWP more specifically later.
This number is issued by the Indonesian Tax Authority, Directorate General of Taxes (Direktorat Jenderal Pajak).
NPWP holds significance within the Indonesian tax system. It enables tax authorities to recognize and track your tax payment history and ensure your compliance with tax regulations.
The taxpayers (wajib pajak) are required to pay monthly income taxes, file annual taxes, and report income they earned outside Indonesia.
Types of NPWP in Indonesia
As stated on Undang-undang (UU) No. 6 Tahun 1983, there are two types of NPWP in Indonesia, as follows:
1. Individual NPWP
Individual NPWP is a type of NPWP that is issued for individuals who generate income in Indonesia, whether the individual is an Indonesian citizen or non-Indonesian (an expat).
There are three types of individual or personal NPWP – individuals who have income from permanent employment, individuals who have income from freelance, and individuals who have income from business.
2. Corporate NPWP
Corporate NPWP is issued for businesses or companies that generate income in Indonesia, including PT PMA.
NPWP for corporations has three types, such as:
- Private company (limited liability company, commanditaire company, and others).
- State-owned enterprise or regionally-owned enterprise.
- Firm, cooperative, association, foundation, or other organizations.
- Permanent establishments.
Who Can Register for NPWP in Indonesia?
According to Undang-undang (UU) No. 7 Tahun 1983, the individuals and entities listed below are required to undergo NPWP (taxpayer identification number) registration in Indonesia:
- Reside in Indonesia and staying in Indonesia for more than 183 (one hundred and eighty-three) days within 12 (twelve) months period.
- Corporate established or having their domicile in Indonesia (including PT PMA).
- Undivided inheritances as one unity replace those who are entitled.
Requirements for Obtaining NPWP in Indonesia
Whether you register for NPWP as an individual or for your company, it’s essential to know what are the required documents for obtaining NPWP in Indonesia and make sure you complete those. The requirements are:
1. Required Documents for Individual NPWP
All types of individual NPWP have same required documents, such as:
- Scan of ID card / KTP (for Indonesian citizens).
- Scan of passport and KITAS / KITAP (for foreigners).
2. Required Documents for Corporate NPWP
All types of corporate NPWP have same required documents, such as:
- Individual NPWP of board members.
- KTP (for Indonesian citizens).
- KITAS / KITAP (for foreigners).
6 Simple Steps to Get NPWP Online
You can register for NPWP in Indonesia quickly and easily online. Also, the cost of obtaining NPWP is free. You only need to gather the required documents and follow all the instructions to make your process seamless. Here is the process that involves, as outlined below:
1. Prepare the Required Documents
The first step is preparing all the required documents before applying for NPWP. Remember, the required documents may be different depending on what kind of NPWP you want to obtain – individual or corporate.
2. Register on the Directorate General of Taxes’ Website
Open the Directorate General of Taxes’ website (ereg.pajak.go.id) and follow all the instructions. Then, you’ll get an email from eregistration@pajak.go.id that contains a link. Click the link to continue to the 2nd registration.
After that, you’ll get another email from eregistration@pajak.go.id that contains a link that will redirect you to the application form.
3. Fill the Online Application Form
Fill out the online application form completely. Here, the information is about tax category, identity, income, address, company address, additional info, etc.
4. Submit the Application and Verification
After you fill out the form, apply. Then, click “Minta Token” to get a token for verification.
Now, revisit a new tab on your browser to check your email and access the latest message from eregistration@pajak.go.id. Copy the token code provided in that email.
Back to the website’s tab, click “Kirim Permohonan”. Check all boxes and paste the token code. Click “Kirim”.
5. Approval
Please wait until your application status is “verified”. Then, review the email to see the confirmation email. In that email, you’ll get your NPWP number card.
6. Obtain Your NPWP
Now, you’ve obtained your NPWP online. You have the option to either save it as PDF or print it.
4 Benefits of Obtaining NPWP in Indonesia
Having an NPWP (taxpayer identification number) also serves several benefits for you, such as:
- NPWP number serves as your unique identification within the Indonesian tax system.
- As a requirement for obtaining a credit card.
- Enables you to manage tax-related tasks and monitor your compliance with the Indonesian tax system.
- Requirements for obtaining a Trade Business License (SIUP).
Generate Income in Indonesia Seamlessly!
Understanding and obedience to the Indonesian tax system is essential to make your generating income activity in Indonesia legal and seamless.
There are two kinds of NPWP in Indonesia – individual and corporate. Required the documents and making process of NPWP isn't complicated as long as you gather the documents completely and follow the instructions carefully.
